This week, the acrylic acid market broke the previous consolidation pattern and experienced a substantial price increase. Unlike the “profit recovery driven resumption of production” in mid to early February, the core driving force behind this round of price increases has shifted to the resonance between cost side restart and supply side tightness, and effective absorption has been formed through downstream rigid demand procurement. The market logic returns from “profit driven” to “cost driven+supply supported”. As of February 25th, the benchmark price of acrylic acid in Shengyi Society was 6283.33 yuan/ton, an increase of 2.01% compared to the beginning of this month (6116.67 yuan/ton).
1、 Cost side:
This week, there has been a key change in the cost side: the price of raw material propylene has ended its previous stable trend and resumed its upward trend. On February 25th, the benchmark price of propylene in Shengyi Society was 6521.00 yuan/ton, an increase of 1.82% compared to the beginning of this month (6404.33 yuan/ton).
The renewed efforts on the cost side have directly compressed the profit margin of acrylic acid production, prompting production enterprises to raise their quotations to transmit cost pressure. The production enterprise quickly responded. On February 24th, the price of Shanghai Acrylic Acid East China was raised by 100 yuan/ton to 6100 yuan/ton; On February 25th, the company once again raised the price by 100 yuan/ton to 6200 yuan/ton. The cumulative increase within two days is 200 yuan/ton, with a growth rate of 3.33%. It is worth noting that the increase in the South China market is more significant, with the price of acrylic acid in the South China market rising directly from 6300 yuan/ton to 6700 yuan/ton, a daily increase of 400 yuan/ton, reflecting the intensification of regional supply tightness.
2、 Supply side:
The supply side presents the characteristics of “high inventory and incremental digestion”. As of February 24th, the average capacity utilization rate of the domestic acrylic acid industry remained at a high level of 85.94%, continuing to rise slightly compared to the previous week. This level of production indicates that the manufacturing enterprise has a strong willingness to resume production and has the ability to undertake current orders.
In terms of incremental production capacity, BASF Zhanjiang Integrated Base’s 400000 tons/year butyl acrylate plant has been fully put into operation in February. From the market performance, the release of this new production capacity has not suppressed prices, but has been effectively digested by downstream demand, confirming the resilience of demand.
It is worth noting that this week’s price increase was accompanied by a transaction characteristic of “actual order negotiation as the main focus”, indicating that sellers still maintain flexible bargaining space during the price increase process, and the market has not shown signs of overheating.
3、 Demand side:
The demand side presents a healthy transmission pattern of “upstream price increases, downstream price increases”.
On the one hand, essential procurement continues to exist. Although downstream users still hold a wait-and-see attitude, the pattern of “decent transactions” indicates that rigid demand has not shrunk due to price increases. On February 24th, the price of acrylic acid in the East China region was 5850 yuan/ton, an increase of 50 yuan/ton compared to the previous month, indicating market capacity.
On the other hand, downstream derivatives are synchronously rising, providing support for upstream price increases. On February 24th, the price of ethyl acrylate in East China was increased by 100 yuan/ton to 9500 yuan/ton. The simultaneous increase in the quantity and price of downstream derivatives means that the cost transmission chain is smooth, and the purchasing willingness of producers is enhanced, forming a positive feedback on upstream acrylic acid.
In summary, the increase in acrylic acid prices this week is the result of the combined effects of rising costs, high supply, and demand absorption. The core transmission path is: the rebound of raw material propylene prices squeezes profit margins and drives production enterprises to raise their quotations; The supply side maintains high operating capacity, and new production capacity is smoothly digested; Downstream derivatives are rising, forming a positive transmission of the industrial chain. Unlike the previous “profit recovery driven resumption of production”, this round of price increases has shifted towards the logic of “cost push+supply support”. The future trend depends on whether the price of raw material propylene can continue to rise and the downstream capacity to undertake it.
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